Recent Trends Driving Transportation and Logistics
An Overview by Don Horning
The importance of transportation and logistics (T&L) within companies has grown considerably in recent years, and will continue to gain in strategic value to the enterprise in the months and years to come. Effective T&L strategies have become competitive weapons for many companies, creating a unique competitive advantage exploited by the most successful companies in the world. This has catapulted T&L from the ‘backroom’ to the ‘boardroom’ as executives work to execute their own T&L strategies, or risk becoming the victim of their competitors.
The trends driving the increased value of T&L are:
1. Continued focus on inventory reduction (Cash is King)
2. Companies working to enhance the ‘customer experience’ (The Customer is King)
3. Globalization (Distance is Dead)
4. Enabling Technologies (Moore’s Law)
Companies are leveraging advancements in technology to improve collaboration and creating levels of interdependency never before seen. New, technology based, models are emerging that integrate, and the key word is integrate, businesses by synchronizing order fulfillment and product delivery.
Today, excellent logistics and supply chain management are essential elements of successful companies. Transportation and Logistics providers must continually evolve to create innovative, integrated solutions to support the future supply chain strategies for these customers.
Inventory Reduction Cash is King
Tying up cash in inventory is an ineffective business practice. The desired state for any organization is to hold onto cash until the last possible moment. This increases flexibility and reduces the risk associated with holding large quantities of inventory. New purchasing strategies focus on purchasing goods as close to the time of consumption as possible. Just-in-Time (JIT) inventory strategies are in use by many companies. IBM and Dell order Pentium...